Elsztain withdraws application for Clal Insurance control permit

Eduardo Elsztain  photo: Eyal Izhar

The move means that IDB Development, which Eduardo Elsztain controls, will have to sell its holdings in Clal Insurance on the market.

After realizing that he will not receive a permit to control Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) in any control structure, whether via Discount Investment or IDB Development, IDB controlling shareholder Eduardo Elsztain has notified the Commissioner of Capital Markets, Insurance and Savings that he is withdrawing his application for a permit.

This is not earth-shaking news for Clal Insurance, for which nothing has really changed. Since 2013, the controlling stake in Clal Insurance has not belonged to the IDB group but has been in the hands of a trustee, Moshe Tery. Tery is under an obligation to sell Clal Insurance shares belonging to IDB, and he does so every four months. He is now expected to continue the sales, with the next one due in September.

Any holding of 5% in an insurance company of financial institution requires approval by the Commissioner of Capital Markets, Insurance and Savings, and such approval is not easily obtained. The IDB group, it should be mentioned, is in financial difficulties and on te hway to the further debt settlement.

The withdrawal of Elsztain's application should not affect the deals to sell shares in Clal Insurance to Eyal Lapidot and Yakir Gabbay, who may even incease their stakes in the insurance company.

In the background in the Concentration Law, which obliges IDB to relinquish either its financial holdings or its real holdings by December this year. Although Elsztain has said in recent months that he would lie to keep the financial holdings, simce he was not due to receive regulatory approval, in any event he could not retain substantial financial activity (IDB also holds shares in investment house Epsilon). It would seem, then, that Elsztain's decision, which is a recognition of reality, makes it clear that he has chosen to retain his non-financial businesses.

Published by Globes, Israel business news - en.globes.co.il - on July 21, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Published by Globes, Israel business news - en.globes.co.il - on July 21, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Eduardo Elsztain  photo: Eyal Izhar
Eduardo Elsztain photo: Eyal Izhar
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